Introduction to this week’s blog posting. Whew! What an exciting two weeks it’s been, processing your answers to the Five Tough Questions! And, if not already an affiliate of COBA7®, here’s one more (new) good reason to do so ASAP! And finally; a successful LLLCommunity owner/operator ‘goes on record’ as to why he/she actively sells & self-finances new HUD-Code homes on-site in LLLCommunities. Three hot topics to read here!

I.

Blog Readers’ Reply to Five Tough Questions

Few of our weekly blog postings during the past seven years have generated as much thoughtful, helpful, passionate response at this multifaceted topic two weeks ago:

‘Five Tough Manufactured Housing Questions Never Before Addressed in Any Public Forum’

Two weeks later, we continue to receive worthy input from businessmen and women actively engaged in manufactured housing & or land-lease-lifestyle communities.

Following are abbreviated versions of the Five Tough Questions, followed by a summary composite of responses received from at least a dozen conscientious individuals.

One response: “If not too late, exit HUD regulation (and join NAHB); but if too late to exit, then simply find ways to WIN with them hanging on our backs. HUD is not fixable, nor will they ever be. They are ‘gubment’ and like Reagan said so well, ‘Beware the person knocking on your door, saying: ‘Hi, I’m from the government, and I’m here to help you.” NB

Probable Bottom Line? Our ‘Big 3-C’ HUD-Code home manufacturers have far too much invested in the past-to-present day business model to change anytime soon; and frankly, they appreciate, even enjoy the protection federal preemption provides, relative to the HUD’s performance-based building code. And given the recent increase in HUD label fees, and moving to the front burner, long dormant programs with potential fines attached, smacks of assurance dollars will be forthcoming to keep the manufactured housing program afloat. Forget deregulation for the foreseeable future!

The latter possibility raises more questions than answers at present, e.g. “How’s this handled in Hawaii? How’s it handled in New Hampshire, where ‘the change’ is already long in place among all LLLCommunities there?” BB. Hmm. Lessons to be learned, pondered and maybe someday effected!”

Manufactured housing marketing and sales = manufactured housing distribution. And at present we have four distinct, though at times overlapping business models afoot:

• Independent (street) MHRetailers (formerly known as ‘dealers’). Traditionally filled vacant rental homesites in manufactured home communities cum land-lease-lifestyle communities. Today? Depends on the local housing market, but there’s still ‘some of the same’, as well as strong interest in selling/contracting land & home packages using manufactured and modular homes. But far fewer in business today than 15 years ago.

• Company stores. Manufacturer-owned (street) MHRetailers primarily marketing their corporate brand(s) of manufactured and modular homes in the manner just described..

• Quasi direct sales to consumer outlets, e.g. Factory Expo Homes and others. Where new manufactured homes are marketed online, and or at sales centers often sited near home manufacturing plants. ‘Quasi’ (‘almost’), because consumers remain unable to buy new manufactured homes directly from manufacturers.

• Land-lease-lifestyle Communities. Today, this is a mixed-bag situation. Many, if not most LLLCommunity portfolio owners/operators are engaged in on-site marketing, sales, even seller-financing of new manufactured homes to fill vacant rental homesites. However, this paradigm shift in that business model has yet to impact the majority of LLLCommunities throughout the U.S., i.e. those properties containing fewer than 100 rental homesites apiece, or 85 percent of the estimated 50,000 property inventory nationwide..

Probable Bottom Line? While all are valid means for distributing HUD-code manufactured homes nationwide, a major evolution in home sales could occur among the aforesaid 85 percent of the estimated 50,000+/- national inventory of smaller LLLCommunities; as owners/operators 1) learn how to market, sell and seller-finance new homes on-site; and, 2) HUD-Code home manufacturers recognize this mostly untapped national market, and make it easier for owners/operators to buy, even finance, their product upon sale to homebuyers/site lessees. Both must happen, or this fledgling ‘buy here/pay here’ MH distribution model will not blossom!

Probable Bottom Line. This is a scary question, one awash with unanswered questions. If HUD enforces the Federal Installation Standard in 2016, land-lease-lifestyle communities will likely bear the brunt of the estimated $5,000.00/rental homesite ‘new foundation’ or ‘retrofitting’ cost! The unanswered questions: Will existing concrete foundations, in presently compliant states, be grandfathered – as rumored? Will HUD ‘encourage or discourage’ widespread use and approval of the Frost Free Foundation®, among LLLCommunity owners/operators and state inspection agencies, in lieu of wholesale reconfiguration of rental homesites? To learn more about Frost Free Foundation®, phone the official MHIndustry HOTLINE: (877) MFD-HSNG & request the COBA7® FFF Signature Series Resource Document, or SSRD. It’s FREE to everyone! A simplest answer to all this, for the time being, is to buy one’s new HUD-Code homes only from manufacturers describing and encouraging use of FFF in their official Installation Manuals; learn all you can about the FFF system; and, implement it properly!

Probable Bottom Line. The blog flogger (reader) is right. In the words of the French: ‘laissez-faire’ or noninterference! After all, look what happened to the original ARC, more than one LLLCommunity REIT; Capital First Realty and others. Just be aware, the 3:1 Rule of Thumb (i.e. average area site rent = 1/3rd unit rent for a 3BR2B conventional apartment in same local housing market) has worked well for more than 40 years; while the 2:1 Rule of Thumb aberration not nearly so well, except in a few specialty (e.g. Sunbelt, all adult communities) local housing markets!

II.

COBA7® Partners with Community Buying Group
to Save Affiliates $$$!

Did you know? COBA7®, as a valuable new service for its’ hundreds of its’ affiliates, has partnered with Community Buying Group, to save money on materials, products and services from a wide variety of national sources and vendors. And there’s NO cost to COBA7® affiliates for this unique service.

Begin buying and saving at Lowe’s, Sherwin-Williams, Sunbelt Rentals, and at least 20 additional CBG Preferred Partners. And the most exciting part we can’t tell you yet, beyond this hint: ‘Who’d YOU like to buy WHAT from, in this MHBusiness, and save mega-dollars along the way?’ Think about it….

Community Buying Group has a list of all COBA7® affiliates. So, as an affiliate, all you have to do is visit COBA7Benefits.com to sign up NOW! Couldn’t be easier!

To affiliate with COBA7®, simply telephone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Frankly, It’s, by far, the wisest way to invest $134.95, or $544.95, even $944.95/year to receive, in the first instance, 12 issues of the Allen Letter professional journal; or, same subscription, plus a dozen Signature Series Resource Documents, e.g. annual ALLEN REPORT, Lenders’ Registry, and much much more! And the $944.95 gets you the Allen Letter, 12 SSRDs, and the Allen CONFIDENTIAL! business newsletter…containing MHIndustry intelligence before it becomes MHIndustry News!

III.

The Compelling Case for Selling New HUD
Homes on-site in LLLCommunities!

Received the following, as an email, from a fellow LLLCommunity owner and COBA7® affiliate.

“New manufactured homes work best for me right now, because ‘repos’ are older, harder to find, and more expensive. Our experience is, buyers prefer new manufactured homes for the same reasons they prefer new cars: no previous owner, no dents or scratches, no smoke or pet odors, and the one year bumper-to-bumper warranty. The key to successful manufactured housing sales is to qualify the buyer and get a substantial down payment on the new home. Specifically, sell to those who CAN & WILL make the mortgage payments. New manufactured homes generally improve the appearance of the LLLCommunity and attract a higher demographic resident, as well as prospective homebuyers.”

As a related aside, this LLLCommunity owner/operator provides seller-originated financing for virtually all his/her homebuyer/site lessees. This chattel capital comes from local banks, private sources, etc.

Pretty much says it all, dontcha think? Come to the 24th annual International Networking Roundtable, 9-11 September 2015, at the Hilton Resort Hotel on Mission Bay in San Diego, CA., and learn more about this process – particularly those of you reading this blog posting not yet engaged in the on-site sale and seller-financing of new HUD-Code manufactured homes. For a descriptive brochure/registration form, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.